India Inc slams decision to hold back disinvestment

Leading industry chambers on Thursday expressed concern over the government's decision to hold back disinvestment in public sector companies and said the move would send wrong signals about the future of economic reforms in the country.

"CII expresses deep concern over the government's decision to keep all disinvestment decisions on hold," chamber president R Seshasayee said in a statement.

FICCI President Saroj Poddar said that the decision would send wrong signals about the reforms programme of the country.

"The disinvestment of PSU shares had played a critical role in the development of the Indian capital market since reforms were started in 1991, and this decision might erode the value of PSU shares in the market," Poddar said.

"We hope that this decision will not set up a bad precedent for the Indian economy," Assocham President said in a statement.

Aggarwal said that limited disinvestment of government equity in profit-making Nevyeli Lignite Corp should have been effected as per schedule.

Disinvestment in profit-making companies is the reality of the day as the government needs revenue to contain fiscal deficit and generate funds for building infrastructure, he said.

Poddar hoped that the government would review the decision keeping in view the broader interests of the Indian economy and attractiveness of India for global investors.

CII also urged the government to take a speedy decision on disinvestment in consultation with UPA members so that the economy grows unimpeded.